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Morning Market Review for June 24, 2021

scyther5/Thinkstock Markets-122316-scyther5-ThinkstockPhotos-2000
Improving Midwest forecast sends corn, soy lower. (Comments are updated by 7:30 a.m. Central Time.)

Spring wheat tries to stave off losses as wetter weather closes in

  • Corn down 7-12 cents
  • Soybeans down 14-20 cents, soyoil down $0.55/lb, soymeal down $3.70/ton
  • Chicago & Kansas City wheat down 6-11 cents; Minneapolis wheat mixed

*Prices as of 6:50 am CDT.

Good Morning! How are crops looking in your area? Click here to take our ongoing farmer survey on crop progress at any point in the 2021 grain season. Our Google Map, updated daily, provides all past responses for farm readers.

Corn

Corn prices pared back its gains from the previous four trading sessions this morning, falling $0.07-$0.12/bushel as a rainy weekend forecast improved yield prospects for the young crop. But the losses were limited by rising Chinese export demand, which will be closely watched in today’s weekly Export Sales report from USDA.

Corn export loading paces are likely to fall slightly off last week’s volumes, but still remain seasonally strong, nonetheless. Monday’s Grain Inspections for Export report from USDA saw 58.3 million bushels of corn weighed for export for the June 11-17 reporting period.

It marked an 8% decline from prior week volumes but remained strong relative to prior weekly volumes in the marketing year, buoyed by high shipping rates to China and Southeast Asian countries.

New crop (2021/22) corn export sales will also be closely watched in today’s Export Sales report from USDA after China went on a massive corn export buying spree during the reporting period. Trade analysts peg today’s total between 3.9 million – 19.7 million bushels.

Soybeans

Soybean prices also tumbled lower this morning, pointing to a third consecutive day of losses for the complex. Favorable rains forecast across the Upper Midwest bode well for heat-stressed crops, sending Chicago futures $0.14-$0.20/bushel lower. Strong Chinese export demand prospects this week capped losses.

After four days of recording higher prices, soybean oil edged lower this morning, following underlying soybean futures prices down overnight. Palm oil production estimates out of Malaysia for June came in higher than expected, adding another layer of price weakness to the edible oil complex in the overnight trading session.

Soymeal prices also took a tumble this morning as soybean prices fell on improving weather in the Midwest. End user demand has weakened in recent weeks as hot weather reduces protein feed requirements for livestock. Firming basis bids for barges destined for the U.S. Gulf yesterday point to increasing export demand for U.S. soymeal.

China has snapped up another large daily soybean export order, according to USDA export sales data announced yesterday. It marks the second soybean sale booked by the Chinese this week, with traders largely expecting the order to be shipped out of the Pacific Northwest for delivery into China later this fall.

China booked 12.1 million bushels of soybeans as part of the purchase. China had already ordered 12.3 million bushels of 2021/22 soybeans on Monday. An unknown buyer also purchased 4.4 million bushels of 2021/22 soybeans on Monday.

The new sales are not likely to impact today’s Export Sales report data from USDA, as today’s reporting period only spans through June 11-17. But it’s a boost the U.S. soy complex needs as export loading paces shrivel to seasonal lows.

Today’s report expects to see 2020/21 soybean export sales for the week ending June 17 to range between 3.7 million bushels of cancellations and 6.4 million bushels of new orders. But the increasing buying paces from Chinese and unknown buyers bode well for 2021/22 soy export sales, which are expected to range between 7.3 million – 29.4 million bushels in today’s report.

Wheat

Dry conditions and potential shortfalls for the spring wheat crop in the Northern Plains continue to prop up Minneapolis spring wheat prices this morning. A weaker dollar also capped the morning’s losses.

The dry conditions limited losses for Chicago and Kansas City winter wheat futures, which fell $0.06-$0.11/bushel on advancing harvest paces across the Northern Hemisphere.

The European Commission trimmed its forecast for 2021/22 wheat production for the bloc from prior month estimates due to increasingly dry conditions in Central Europe. As announced overnight, the 27-country bloc is expected to produce 4.6 billion bushels of wheat in 2021/22, down 15 million bushels from last month’s projection.

But even with the smaller crop, European Union wheat exports are expected to rise in 2021/22 as yields are likely to be higher than the prior growing season when a wet planting season and dry conditions during the spring stunted crop development. The European Commission expects 2021/22 EU wheat exports outside of member countries will reach 1.1 billion bushels, up 11% from the prior marketing year.

Winter barley harvest is underway in Russia and yield prospects for the world’s largest wheat exporter are looking more favorable with every passing day. Harvest began yesterday in Russia’s southern Stavropol region, with combining activity for the region’s winter wheat crop expected to pick up in the next week.

Winter wheat harvest in Southern Russia is a week and a half to two weeks behind average historical paces due to cool and rainy weather during the spring growing season. But the weather delays are likely to bode well for yield development in the final days of crop maturation.

Leading Russian agricultural consultancy Sovecon expects Russian farmers will harvest 3.1 billion bushels of wheat this summer. USDA forecasts 2021/22 Russian wheat production at 3.2 billion bushels.

Weather

Rain showers could help cool off the Plains and Upper Midwest today, according to NOAA’s short-range forecasts. Thunderstorms and showers are forecast across the Northern Plains and Upper Mississippi River Valley through the evening, with more showers expected tomorrow as another rain system develops in the Northern Rockies.

These are the showers growers in Iowa have been waiting for all season. NOAA predicts large portions of Iowa could see one to two inches of rain over the next 24 hours, which would provide substantial relief to drought conditions in the state.

Illinois and Wisconsin are also likely to see similar substantial accumulation. Showers in the Northern and Central Plains are likely to be lighter, with a maximum shower of one inch expected over the next 24 hours. But with more rain expected to roll in from the Northern Rockies, the region could experience its first substantial precipitation event of the 2021 growing season over the weekend.

Financials

Coronavirus cases in the U.S. rose to 33,578,819cases as of this morning according to the Johns Hopkins Coronavirus Resource Center. The death toll increased to 602,838 deaths as of press time. Both metrics have slowed considerably as vaccination rates rise and life begins to return to more normal patterns.

According to the CDC, nearly 54% of the total U.S. population has received at least one COVID-19 vaccine. Nearly 151 million Americans (45%) are fully vaccinated. Over 2.7 billion vaccine doses have been administered worldwide.

Per acre fertilizer costs have risen $50 since last fall, Farm Futures contributing analyst Bryce Knorr points out. “And there’s no indication anything will get any cheaper this summer when suppliers post offer sheets for summer and fall deliveries,” Knorr forecasts in the latest Ag Marketing IQ column.

The sky rocketing input costs mirror those of 2011 and 2012. “And while 2022 may seem like a long way off, the rally by nutrients is already threatening to rerail corn profitability on next year’s crop,” Knorr foreshadows. “The increase in corn fertilizer costs amounts to 25 to 30 cents a bushel.”

With recent basis depreciation in the cash markets coming from ethanol producers, farmers may need to act fast to book 2022 input supplies once pricing becomes available in August. Knorr cautions farmers to be wary of availability constraints during fall fertilizer application season, pointing out that the global supply chain continues to struggle as the world emerges from the pandemic.

Last night, a federal judge in Florida’s Middle District Court issued a temporary blockade on the Biden Administration’s $4 billion debt relief program for socially disadvantaged farmers as part of the recent federal stimulus relief program. U.S. district judge Marcia Morales Howard ruled against the program, citing that its “rigid, categorical, race-based qualification for relief is the antithesis of flexibility."

The suit was brought to the courts by Scott Wynn, a white corn, cattle, and sweet potato grower in Florida who began farming in 2006. Wynn argued the program, aimed at providing additional debt relief to minority farmers who have a long-documented history of discrimination from USDA lenders, violates his right to equal protection under the law.

U.S. farmers received over $46 billion in federal handouts last year as part of other pandemic relief programs and are expected to receive another $25 billion this year.

U.S. stocks rose this morning on optimism about weekly data for unemployment claims expected this morning as well as data on durable goods demanded. The energy sector pared back gains. S&P 500 futures climbed 0.46% higher to $4,250.75.

Morning Ag Commodity Prices - 6/24/2021
Contract Units High Low Last Net Change % Change
JUL '21 CORN $ / BSH  6.64 6.5725 6.58 -0.0625 -0.94%
SEP '21 CORN $ / BSH  5.49 5.4 5.4125 -0.0975 -1.77%
DEC '21 CORN $ / BSH  5.34 5.2375 5.245 -0.1125 -2.10%
MAR '22 CORN $ / BSH  5.4125 5.3125 5.3225 -0.105 -1.93%
MAY '22 CORN $ / BSH  5.455 5.36 5.375 -0.1 -1.83%
JUL '22 CORN $ / BSH  5.4725 5.38 5.385 -0.1075 -1.96%
SEP '22 CORN $ / BSH  4.965 4.915 4.9275 -0.07 -1.40%
JUL '21 SOYBEANS $ / BSH  13.85 13.6125 13.7225 -0.1275 -0.92%
AUG '21 SOYBEANS $ / BSH  13.46 13.2075 13.3125 -0.1475 -1.10%
SEP '21 SOYBEANS $ / BSH  13.0825 12.88 12.955 -0.125 -0.96%
NOV '21 SOYBEANS $ / BSH  12.9975 12.775 12.8725 -0.13 -1.00%
JAN '22 SOYBEANS $ / BSH  13.0375 12.82 12.9075 -0.14 -1.07%
MAR '22 SOYBEANS $ / BSH  12.9125 12.69 12.7875 -0.145 -1.12%
MAY '22 SOYBEANS $ / BSH  12.92 12.6775 12.82 -0.115 -0.89%
JUL '22 SOYBEANS $ / BSH  12.9425 12.715 12.78 -0.195 -1.50%
AUG '22 SOYBEANS $ / BSH  12.8525 12.735 12.745 -0.1375 -1.07%
JUL '21 SOYBEAN OIL  $ / LB 62.15 60.95 61.61 -0.52 -0.84%
AUG '21 SOYBEAN OIL  $ / LB 60.67 59.56 60.28 -0.39 -0.64%
JUL '21 SOY MEAL $ / TON 355 350 350.9 -3.3 -0.93%
AUG '21 SOY MEAL $ / TON 355.5 350.1 351.1 -3.4 -0.96%
SEP '21 SOY MEAL $ / TON 356.7 351.6 352.4 -3.5 -0.98%
OCT '21 SOY MEAL $ / TON 356.5 351.8 352.9 -2.9 -0.82%
DEC '21 SOY MEAL $ / TON 361 355.6 356.8 -2.8 -0.78%
JUL '21 Chicago SRW $ / BSH  6.6075 6.4975 6.52 -0.0925 -1.40%
SEP '21 Chicago SRW $ / BSH  6.625 6.52 6.5375 -0.1 -1.51%
DEC '21 Chicago SRW $ / BSH  6.6925 6.585 6.605 -0.0975 -1.45%
MAR '22 Chicago SRW $ / BSH  6.7525 6.65 6.6675 -0.1025 -1.51%
MAY '22 Chicago SRW $ / BSH  6.7675 6.6725 6.685 -0.1 -1.47%
JUL '21 Kansas City HRW $ / BSH  6.14 6.05 6.0675 -0.0525 -0.86%
SEP '21 Kansas City HRW $ / BSH  6.2325 6.1375 6.1575 -0.05 -0.81%
DEC '21 Kansas City HRW $ / BSH  6.3275 6.2325 6.2475 -0.06 -0.95%
MAR '22 Kansas City HRW $ / BSH  6.4175 6.3325 6.3475 -0.06 -0.94%
MAY '22 Kansas City HRW $ / BSH  6.485 6.4425 6.485 0.0125 0.19%
JUL '21 MLPS Spring Wheat $ / BSH  8.115 8.0375 8.095 0.0475 0.59%
SEP '21 MLPS Spring Wheat $ / BSH  8.07 8.0025 8.045 0.0225 0.28%
DEC '21 MLPS Spring Wheat $ / BSH  8.005 7.955 7.9925 0.0175 0.22%
MAR '22 MLPS Spring Wheat $ / BSH  7.9525 7.9525 7.9525 0.0125 0.16%
MAY '22 MLPS Spring Wheat $ / BSH  7.8975 #N/A 7.895 0 0.00%
SEP '21 ICE Dollar Index $ 91.865 91.65 91.76 -0.025 -0.03%
 AU '21 Light Crude $ / BBL  73.61 72.8 72.96 -0.12 -0.16%
 SE '21 Light Crude $ / BBL  72.86 72.09 72.24 -0.12 -0.17%
JUL '21 ULS Diesel $ /U GAL 2.1614 2.1391 2.1431 -0.0163 -0.75%
AUG '21 ULS Diesel $ /U GAL 2.1645 2.1422 2.1463 -0.0161 -0.74%
JUL '21 Gasoline $ /U GAL 2.2753 2.2551 2.2574 -0.0095 -0.42%
AUG '21 Gasoline $ /U GAL 2.2784 2.2568 2.2596 -0.0103 -0.45%
AUG '21 Feeder Cattle $ / CWT 0 #N/A 155.7 0 0.00%
SEP '21 Feeder Cattle $ / CWT 0 #N/A 158.075 0 0.00%
 JU '21 Live Cattle $ / CWT 0 #N/A 122.5 0 0.00%
 AU '21 Live Cattle $ / CWT 0 #N/A 122.875 0 0.00%
JUL '21 Live Hogs $ / CWT 0 #N/A 104.525 0 0.00%
AUG '21 Live Hogs $ / CWT 0 #N/A 100.725 0 0.00%
JUN '21 Class III Milk $ / CWT 17.21 17.21 17.21 -0.13 -0.75%
JUL '21 Class III Milk $ / CWT 16.51 16.5 16.5 -0.1 -0.60%
AUG '21 Class III Milk $ / CWT 16.65 16.65 16.65 -0.14 -0.83%
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